Devakumar Edwin, the Executive Director of the Dangote Group, has announced that the Dangote Refinery is preparing to commence its operations for refining diesel and jet fuel by October 2023, followed by petrol refining in November 2023.
In an interview with S&P Global Commodity Insights on September 18, Edwin shared that the refinery is expecting its initial shipment of crude within the next two weeks, paving the way to produce up to 370,000 barrels per day of diesel and jet fuel starting from October 2023. Additionally, the phased increase to 650,000 barrels per day of petrol refining will commence by November 30.
Edwin remarked, “Right now, I’m ready to receive crude. We are just waiting for the first vessel. And so as soon as it comes in, we can start.”
Regarding the timeline adjustment, Edwin explained that the Nigerian National Petroleum Corporation Limited (NNPCL) had initially allocated its crude to another entity in advance, which caused a temporary delay in the process. He anticipates that the refinery will exclusively run on Nigerian crude by November 2023.
Furthermore, Edwin clarified that Nigerian crude would be procured in U.S. dollars, not naira, since the refinery operates within a free zone on the outskirts of Lagos. However, NNPCL would offer some crude at discounted rates due to its equity participation.
Edwin also noted that the Dangote refinery possesses the capability to process most African crude varieties, except for heavy Angolan grades, Middle Eastern Arab Light, and certain U.S. light tight oil types.
He highlighted, “We can take even some of the Russian grades… if the global system opens up to allow us to receive them. Basically, if you look at our production profile, 50% of my production will meet 100% of the requirements of the country.”
Excess gasoline, meeting Euro 5 quality standards with a sulfur content of 10 ppm, will be exported to other African markets, the United States, and South America, though the export volume will be relatively limited. Meanwhile, jet fuel will be exported to Europe, and diesel will be distributed in sub-Saharan Africa.
In addition, Edwin emphasized that the Dangote Refinery will significantly benefit Nigeria by providing a stable supply of “environmentally friendly” refined products and contributing substantial foreign exchange to the country. He anticipates that the refinery will help alleviate the fuel supply challenges in import-dependent West Africa, particularly in Nigeria, where the recent discontinuation of the fuel subsidy led to a flourishing illicit gasoline market amid price fluctuations.
Lastly, he highlighted that the funds reinvested in the refinery sector would support further developments, aligning with Aliko Dangote’s commitment to Nigeria.